Private Health Insurance Vs. Government Run Health Insurance

My family has been in the unique position of being able to simultaneously compare private health insurance with government run health insurance for more than five years.  When we applied for our individual Blue Cross Blue Shield of Nebraska policy our family's saga began.  Blue Cross denied coverage for my wife because a blood test in her medical record produced a slightly abnormal reading.  My wife has an incidental condition which occurs in about 14% of the female population.  The condition does not affect her health status, her life expectancy, nor does it require any medical treatment.  As a result, my wife is enrolled in the Comprehensive Health Insurance Plan operated by the State of Nebraska and administered by Blue Cross Blue Shield of Nebraska.

At $524.89 per month for a plan with a $2,000 annual deductible in 2005, that coverage was initially far more expensive than the cost of the private health coverage Blue Cross Blue Shield of Nebraska offered to cover my son and me.  Coverage for my son and me cost $365.20 in 2005 and included an annual deductible of only $750.

Over the intervening years, deductibles in both plans were increased.  We increased the deductible on my wife's policy from $2,000 per year to $4,000 per year.  The deductible for the policy which covers my son and me was increased from $750 to $2,000 per year.

As we begin our sixth year of coverage in our separate plans, the premium to cover my son and me with private health insurance has risen 111.4 percent, rising from $365.20 to $772.04 per month.  (Admittedly, I have aged from 54 to 59 and my son has aged from five to 10.  We remain in excellent health and have not been hospitalized, but I have taken a generic statin for the past two years, and my son has begun medical treatment for a bronchial condition.)  My wife, has seen her premium increase 16.2% during the same time, rising from $524.89 to $609.73.  And her coverage is provided to the highest risk population in our state.  Our private health coverage has increased in cost 6.8 times faster than our government-run health coverage.

Over this period, the U. S. Department of Labor's Bureau of Labor statistics reports that the Consumer Price Index for medical services rose 20.8 percent, the rate of increase in professional services was 17.5 percent and the rate of increase in hospitals and related services was 36.6 percent.  Those are national averages, and increases in Nebraska have likely been less.

Premiums for my private health insurance are rising three to six times faster than the rate of inflation in the health services the premiums are designed to cover.  Premiums for my wife's government run health insurance plan are running about in line with the rate of inflation in health costs.

Obviously, the other factor in the premium setting equation is utilization.  But in conversations I have with a variety of medical providers in my community, I continually hear that utilization is way off.  Health care used to be recession proof.  Occasionally, utilization would rise as those who were out of work got tests or treatments done that they had put off, now that they had the time.  The Great Recession has been so severe that hospitals and physicians are seeing patients avoiding treatment until it's absolutely necessary.  One of the three major health systems has actually reduced its workforce by several hundred people.

My family's experience with private and government-run health care leaves me with no concerns about the expansion of government-run coverage, and great concerns about continued reliance on a private health care financing system that is badly broken.